In our years of giving indebted Australians advice on their financial difficulties, we have learned that no person’s situation is quite the same as another. Not only is one’s debt level relative to every other aspect of their life, but there are different types of debt that people struggle with, and each come with their own solutions and restraints.
The most common type of debt that people struggle with is unsecured, meaning that there is nothing attached to the account that could be sold if you do not make the payments. Most credit cards, store cards and personal loans are unsecured. Unsecured debts also tend to have higher interest rates and, in the case of cards, are more likely to creep up on you because of how easy they are to keep using.
Many people also call us when they are having trouble paying their secured debts, such as a car loan or home mortgage. The main problem with these types of loans is that they are hard to negotiate with, as the secured creditor has the right to repossess the asset if you do not make your payments. Other problem debts such as fines and child support can be even harder to deal with, as they simply must be paid – not even Bankruptcy can wipe them out.
Depending on what sort of debt you have, it may be possible to become completely or relatively debt free by entering into a Debt Agreement. A Debt Agreement is a legally binding payment arrangement that encompasses all of your unsecured debts. It freezes the interest on those debts and reduces the amount that you pay toward them, and when you complete the Agreement (usually within a period of 3-5 years) you will be legally released from them. There are consequences to entering into a Debt Agreement, and you should discuss these with a reputable Debt Agreement Administrator before making the decision to go ahead with one.
If your debt is all unsecured and you successfully complete a Debt Agreement, you will come out of it “debt free”. If, however, you have any debts that are not covered by a Debt Agreement, such as secured loans and fines, you will not be completely debt free at the end, as these still need to be paid. You may find, though, that putting your unsecured debts into an affordable arrangement will make it easier for you to manage these other debts.
For more information on how to become free of unsecured debt, call one of our consultants today on 1800 676 598. We are fully licensed and qualified to administer a Debt Agreement for you, or, if you are not eligible for one, any of the other insolvency options that are available that will wipe out your unsecured debt. Our advice is impartial and obligation-free, so call us now.